Obeid smell 'like a dead cat': ICAC

FORMER Labor MP Eddie Obeid and his family left a smell like a "dead cat" on a failed coal mining deal, a businessman has told a NSW corruption inquiry.

John Kinghorn, the founder of RAMS Homeloans, also told the Independent Commission Against Corruption (ICAC) on Wednesday he was so "furious" a director of a mining company was querying the $500 million venture he wanted to "chop his head off".

The ICAC is inquiring into whether former NSW resources minister Ian Macdonald rigged the granting of coal exploration licences in the Bylong Valley, and if Mr Obeid benefited.

Mining company White Energy and Cascade Coal, an entity linked to the Obeids, had a $500 million deal connected to an exploration licence in the area but it fell through.

Mr Kinghorn, who'd held shares in Cascade and is a director at White Energy, allegedly stood to make up to $60 million.

The ICAC was on Wednesday played a telephone call between him and fellow Cascade investor John McGuigan from April 7, 2011 in which Mr Kinghorn commented on another director at White Energy, Graham Cubbin.

Mr Cubbin was on an independent board committee reviewing the transaction and had raised concerns about possible Obeid involvement.

"We'll chop this ar**hole's head off," Mr Kinghorn was heard to say in the covertly recorded call.

In another call, secretly taped on March 23 last year, Mr Kinghorn told his friend and business associate Greg Jones he wanted "to find out what the hell this Cubbin guy is up to", referring to him as a "cut snake".

Counsel assisting the commissioner, Geoffrey Watson, SC, suggested to Mr Kinghorn he was furious at Mr Cubbin "because he would not rubber stamp the purchase of Cascade coal".

The inquiry also heard Mr Kinghorn considered the Obeids a "smell" even after they had been removed from the deal.

"The dead cat's gone but the smell is still around, that's what I meant," he said.

The inquiry also heard from Cascade investor Richard Poole's wife, Amanda Poole, whose personal bank account was used to transfer a $5 million payment to an account linked to the Obeids.

She said she didn't know about the payment because she mainly used her credit card.